Earth Orbit Debris: An Economic Model
Indiana University-Purdue University
Peter J. Alexander
Federal Communications Commission
Brendan Michael Cunningham
Eastern Connecticut State University; U.S. Naval Academy
May 14, 2013
Space debris, an externality generated by expended launch vehicles and damaged satellites, reduces the expected value of space activities by increasing the probability of damaging existing satellites or other space vehicles. Unlike terrestrial pollution, debris created in the production process interacts with firms' final products, and is, moreover, self-propagating. Collisions between debris or extant satellites creates additional debris. We construct an economic model to explore private incentives to launch satellites and to mitigate space debris. The model predicts that, relative to the social optimum, firms launch too many satellites and under-invest in debris mitigation technologies. We discuss remediation strategies and policies, and calculate a socially optimal Pigovian tax.
Number of Pages in PDF File: 25
Keywords: satellite, debris, pollution, externality, space, collision
Date posted: May 15, 2013
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